Sunday, February 21, 2010

Traditional CRM is Not Delivering Desired Customer Experience Transformation

Customer experience transformation is rapidly becoming a key business differentiator in the battle to retain customers and grow revenues and wallet share. But many businesses have yet to rise to this challenge, due to constraints imposed by their legacy Customer Relationship Management (CRM) platforms. As a result, they continue to focus on routine operational savings rather than dramatically improving their customers' experience and net promoter scores. These are among the main findings of a major global survey of international businesses across the UK, mainland Europe and the U.S. undertaken by Pegasystems.

"Overall, 62% of respondents saw differentiating their value proposition by customer service rather than by product as essential or very important," says Amy Bethke, senior director of customer process management solutions at Pegasystems. "And this was reinforced by the fact that, as customers or consumers, an overwhelming 74% were very likely or likely to buy more from a company as a result of service excellence that goes beyond expectations."

"But this does not mean that they have been able to achieve these goals within their own business," Bethke adds. "While they aspire to transform their customers' experience, they often prioritize reductions in operational spend (seen to be the main challenge by 34% of respondents) over improvements to the customer experience. And only just more than half of the businesses questioned have a CRM solution that actually extends beyond the contact center and even fewer -- just 43% -- provide a consistent customer experience across all delivery channels. Perhaps most tellingly of all, only two in five have customer service represented at the board level. Clearly, traditional CRM approaches are not enough to enable these critical business goals."

As the broader economy shows signs of an upturn and spending plans on CRM increases, the survey also reflects businesses continuing to achieve 'more with less'. In addition, respondents typically believed that their existing CRM systems could perform better and do more. This reflects the fact that for most call centers the goal is limited by the technology approach to building up as much customer data as possible.

The survey found major differences within the individual geographies. For example:

-- Compared to European counterparts, a higher proportion of U.S. respondents (28% vs. 10%) see existing systems as hindering rather than helping to improve customer service.

-- In identifying the challenges companies face in achieving their objectives, UK respondents see the need to improve CRM systems as especially important (27%, compared the average of 19%). At the same time, in France an overwhelming 50% of respondents put the need to reduce operational spend far ahead of any other concern.

-- In France and Spain, the highest number of respondents (35% and 34% respectively) identified revenue/profit growth as the top business objective, compared to just 19% in Germany.

-- Germany was the only country to confirm reducing customer churn (31%) as more important than revenue/profit growth, which fell to fourth most important, behind recruiting new customers (26%) and growing existing accounts (23%).

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